Arbitrage in Baseball: Did Moneyball Not Work, or Work Too Well?

Did Moneyball work – the idea that you could exploit inefficiencies in baseball long-timers’ approach to buying and selling players? And, to the extent it did, has its advantage been blunted by publicity? In other words, perhaps the Moneyball edge has been arbitraged away.

That is the argument in a new TNR piece “Against Moneyball”. The author, a longtime critic, argues that whatever advantage thinking in sabermetric sorts of ways may have had, those advantages have now been competed away, much like what happens in over-loved trading strategies.

Here is an excerpt:

Except it just hasn’t proven itself to work consistently. His theory that only college pitchers should be drafted over high school ones because of their experience sounded plausible. But it flew in the face of the Atlanta Braves, who won their division 14 years in a row from 1991 to 2005, and relied on pitchers drafted straight out of high school all the while. Beane was also flippant, especially to the ears of anyone who’d ever faced the Yankees’ Mariano Rivera in the postseason, about how there was no need to pay exorbitantly for a closer because just about anyone could close–but then he traded away one of his vaunted draft picks for a reliever who turned out to be lousy anyway.

And yet, Billy Beane will always be something of a patron saint in baseball. Within the endless repository of the Internet, there are still dozens of studies extolling his virtues even now. They conveniently avoid the fact that Beane has never won the World Series, or even got to it. His teams have only made it to the playoffs in two of the last seven seasons. The last was in 2006. Since then the team has never been above .500, including a particularly dismal 75 wins and 87 losses this season.